Search - consideration

Such a mechanism exists, for example, in the case of relief for shares issued as consideration for other shares or as consideration for the payment of a stock dividend. ...

Such a mechanism exists, for example, in the case of relief for shares issued as consideration for other shares or as consideration for the payment of a stock dividend. ...

A holding corporation for a vendor group accomplishes an indirect sale of a business to the Fund by selling shares and limited partnership units to the subsidiary trust of the Fund (the "Trust") in consideration for Class A and Class B units of the Fund (which previously had been transferred by the Fund to the Trust in consideration for debt) and for cash. ...

Before finding that the debentures were repaid on conversion for the issued shares’ stated capital, so that no premium could be deducted under s. 20(1)(f)(ii), the Directorate stated: [T]he jurisprudence has established that the treatment of the issuer and the holder of the shares may be different, that is, it is the stated capital of the shares issued that generally constitutes the cost of the property received in consideration for their issue and it is the FMV of such shares that is used to determine the tax consequences to the holder of the shares when the holder has transferred property in consideration for the acquisition of such shares. ...

21 January 2002 External T.I. 2001-0078735 F- Droit de recevoir une somme-- summary under Proceeds of Disposition Summary Under Tax Topics- Income Tax Act- Section 54- Proceeds of Disposition FMV of contingent right to deferred cash sales proceeds was included in proceeds, with subsequent gain or loss when the contingency was resolved The shareholders of a Canadian-controlled private corporation (Xco) agreed to sell their Xco shares to a public corporation (Yco) in consideration for an upfront cash payment, and for shares of Yco received on an s. 85(1) rollover basis – but with a clause (the “Clause”) in the sale agreement providing that in one year’s time they would receive a further cash payment for each of their Yco shares equal to the deficiency in its trading price in one year’s time as compared to the portion of the sale price allocated to such shares. ... Instead, the right to receive an amount pursuant to the Clause was a capital property, forming part of the non-share consideration that the vendors received on the disposition of their shares in Xco, the cost of which was determined pursuant to paragraph 85(1)(f). ...

B could not … benefit from the rollover … because as consideration for the disposition of the shares they held in the predecessor corporations, they received, in addition to the shares of the capital stock of Amalco, consideration other than shares due to the amalgamation. … Subparagraph (b)(iii) of the definition of "disposition" in subsection 248(1) provides that a disposition of any property includes any transaction or event by which a share is converted because of an amalgamation or merger. ...

CRA provided s. 107.4 rollover rulings respecting a transfer of a proportionate part (the “Transfer Percentage”) of each security holding of each Participating Public Fund (based on the percentage of the NAV of the Participating Public Fund attributable to the units of the Series D or O Unitholders) to the corresponding New Fund (held by the Series D or O Unitholders) for no consideration, with the Series D or O Units in the Participating Public Fund being cancelled for no consideration. ...

Before concluding that it would “generally consider emergency government assistance, including assistance from provinces and municipalities, directly related to COVID-19 to be an extraordinary item,” but that this would include “COVID-19-related government assistance … to the extent that it replaces or is meant to replace normal or recurring government assistance,” the Directorate stated: Generally, we would expect extraordinary items to meet all three of the following characteristics: a) Not be expected to occur regularly or frequently within several years Grants or other government assistance that an entity is eligible to receive on a regular or reoccurring basis would not meet this criteria. b) Not typical of the normal activities or risks inherent in the normal operations of the entity Consideration should be given to the nature of the services or products offered by an entity and the normal environment in which it operates. c) Primarily out of the control of owners or management Consideration should be given to the extent that inflows are influenced by the decision of owners or management. ...

" In ITTN-44, the CRA commented that, in the context of estate freezes of private corporations: “Provided that the owners of all the shares of the corporation act in a manner consistent with the assumption that no value attaches to the voting rights, and the rights are eventually extinguished for no consideration, the CRA will generally not attribute value to the rights. If the holder of the rights uses them to run the corporation in conflict with the common shareholders or seeks or is offered consideration for them, it would be difficult for the CRA to ignore this evidence of value.” ...

Profit- Machinery and Equipment depreciable property retained its character in superficial gain transaction Transactions With a view to Profitco, which is an indirect wholly-owned Canadian subsidiary of a non-resident public company (“Parent”), utilizing the non-capital losses (including potentially carrying them back to a prior year) of Lossco, which is a direct wholly-owned Canadian subsidiary of Parent, Profitco transferred Class 12 property on a s. 85(1) rollover basis to Lossco in consideration for redeemable preferred shares of Lossco, then Lossco transferred the properties back to Profitco in consideration for redeemable preferred shares of Profitco having a paid-up capital equaling their redemption amount, with a joint s. 85(1) election being made at the estimated FMV of the properties, so that Lossco realized recapture of depreciation. ...